Selling your home by opting ‘for sale by owner’ can be a huge decision. It can feel like a giant mountain of a task for the first time sellers. Selling your home by yourself might sound empowering at first. However, the truth is that selling a home without an agent can be very complicated if you are not aware of the whole home selling process. There’s no doubt that it’s a challenge to sell your home by yourself and there’s a lot that goes into the process that a typical homeowner might not know. But thousands of people are doing it and once you know the process, it’s actually very doable.
If you are planning to go for ‘for sale by owner’ and getting ready to put your property on the market, the biggest fear that you might have is – selling your home below its market value and losing money. But what is the right price for your home? A home’s fair market value defines what you could expect to receive if you were to sell your home on that day. This value can differ while you are asking different estate agents. But why take their word for it?
If you don’t know how to determine the market value of your house, you are not alone. Most of the homeowners are absolutely clueless about their home’s true worth.
Don’t be an average homeowner.
Here’s how to know the real value of your home if you go for ‘for sale by owner’:
- Factors that determine a home valuation
– Number of rooms
– Curb appeal
– Square footage
– Type of the property
– Age of the property
– Upgrades and improvements
– Market trends
– School district
– Construction and repair
- Use online valuation tools
There are numerous websites available on the internet that can give you an estimate of your home’s worth such as Zillow, CoStar, and Redfin, etc. You can use these sites, along with other methods, to build a rough estimate of your property’s market value. To achieve accurate results from these websites, you need to provide honest information about the property. You can also include the remodeling or upgrade work that you might have gotten done after you purchased the property.
- Perform a market analysis
If you hire a real estate agent, they usually perform a market analysis for you to evaluate your home’s worth. But since you have opted for ‘for sale by owner, you’ll need to run a comparative market analysis by yourself. To make sure that the price point that you’ve set for your home is fair, you should study the market trends and prices of the properties around you in your neighborhood. In your market analysis, match your property to comparable properties in your neighborhood in terms of features, to get an estimated value of your property.
- Hire an appraiser
Home appraisers tend to give the most accurate home valuations so retain a home appraiser to conduct an appraisal of the property. An average home appraiser costs about 300$ to 500$, depending on the size and location of the property. While estimating the value of your home, appraisers consider trends in the market and comparable properties sold or listed recently. In addition to this, appraisers also research public records, gain further information about the value of your neighborhood and complete a far more thorough inspection of your home.
- Square footage
This is a very basic, yet effective method of evaluating the worth of your home. Locate the recently sold properties in your area that are similar to your home in size, features, age, and square footage. Find the mean sales price of these properties by adding up the total sales price of each property and dividing it by the number of properties. Repeat the same step for the square footage of the properties. Divide the mean sale price by average square footage to calculate the average value of the properties per square foot. Finally, multiply the average value of the properties per square to the number of square feet in your home. This will give you a very accurate estimate of the fair market value of your home.
|Mean sales price =||Total sales price of all properties / total number of properties|
|Mean square footage =||Total square footage of all properties / total number of properties|
|Per square foot value =||Mean sales price / mean square footage|
|The market value of your home =||Per square foot value * Number of square feet in your home.|